Humana increases revenue to $29.4 billion in Q3

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Humana pulled in $29.4 billion in revenue in Q3 of this year, increasing from $25.4 billion in Q3 2023, according to its latest earnings report.

For the first three quarters, Humana has now made about $1.9 billion in profit and $88.5 billion in revenue, as compared to $3 billion and $79 billion, respectively, a year ago.

In remarks from management posted prior to Humana's earnings call, company officials said this performance will allow it to update the 2024 Adjusted EPS outlook to "at least $16," a bump from the previous guidance of "approximately $16." Humana said it's contemplating additional long-term investments. 

"We expect the additional investments to be focused in areas such as supporting profitable membership growth and further strengthening our Stars program," officials wrote in their remarks.

WHAT'S THE IMPACT?

Full-year 2024 individual Medicare Advantage membership growth guidance increased by 40,000, to 265,000, during the quarter, which Humana said was driven by better-then-expected retention and non-DSNP sales.

The company said it remained committed to achieving its individual Medicare Advantage margin target of at least 3%, but acknowledged there's now more risk in the company's efforts to achieve this result by 2027 due to a hit from the 2025 MA Star Ratings results.

Earlier this month, Humana sued the Centers for Medicare and Medicaid Services over the results of the 2025 Medicare Advantage and Part D Star Ratings, with the case centering on cut points, the upper and lower thresholds for each measure, which determine a plan's overall score, from 1-5 stars. Humana is asking for CMS to retract and recalculate "unlawful" star ratings in mid-contract year, as it did with 2024 star ratings with SCAN Health Plan. Humana wants CMS to vacate 2025 star ratings and remand the matter for recalculation.

Only seven plans received 5 stars for Parts C and D performance in the 2025 Medicare Advantage and Part D Star Ratings released by Centers for Medicare and Medicaid Services on October 10. This compares to 38 contracts that received 5 stars in 2024.

Humana said in its comments that it's focused on continuing to advance its integrated health strategy, including by expanding its Medicaid platform – particularly with Michigan's intent to award Humana a contract for its new Highly Integrated Dual Eligible (HIDE) Special Needs Plan (SNP) program. That, the company said, will expand its total footprint to 12 states – nine active states and three in which the company expects to be awarded a contract.

The insurer also said that CenterWell Primary Care performance has exceeded expectations this year, and Humana now expects 20% panel growth and 15% growth in centers in 2024. It plans on expanding the CenterWell Home Health footprint through the acquisition of Intrepid, adding 30 new branch locations and more than 22 field clinicians.

THE LARGER TREND

Humana became the second insurer to sue CMS over Star Ratings, after UnitedHealth Group, and Elevance has also said it's considering its options.

All of the insurers cited a change in cut points as a major reason for their plans receiving lower star rating this year over last.

Cut points for several measures "moved abruptly and substantially upward, significantly depressing MAOs' Star Ratings, including Humana's," Humana's lawsuit said. "Under the 2024 Ratings, 94% of Humana's MA enrollees were in a plan with 4.0 Stars or higher. As a result of the unexplained swings in the most recent cut points calculated by CMS, now only 25% of its enrollees are in plans rated 4.0 stars and above for 2025."

Also, CMS failed to disclose the data needed for Humana to validate the cut points, the insurer said.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.